‘Tourists arrival estimate flawed’

Thiruvananthapuram: The Planning Board has called the tourism department’s bluff. The board, employing a unique methodology based on the per capita GDP of Euro countries, has punctured the department’s optimism on foreign tourist arrivals.

“The department of tourism places the tourism arrival figure at three million for 2020 with annual growth rate of 15 per cent per annum, which far exceeds the projections made by us,” the board’s perspective plan 2030 states.

The board estimates that the foreign arrivals to the state will only be 1.86 million by 2020. According to it,  the magic figure of three million foreign arrivals will be achieved only a decade later in 2030.

The board’s methodology has revealed that economic upheavals badly affect foreign arrivals. The income elasticity of a foreign tourist’s visit to Kerala in relation to the per capita GDP of Euro countries is 3.3.

This means that a one per cent increase/decline of Euro area’s per capita GDP leads to 3.3 per cent increase/decline in the visit of foreign tourists to Kerala. Going by this equation, foreign arrivals should have come down drastically rather than gone up as claimed by the department.

Countries like UK, USA and Canada, from where  the bulk of foreign tourists comes to Kerala,  have still not come out of the financial crisis. Growth in Kerala’s tourist flow remains consistently lower than the national average growth in tourist flow, the perspective plan adds.

The reasons for Kerala’s disappointing tourism performance: “Innovative products and services are still scarce.  The economy is dominated by low knowledge and low technology-intensive small and medium enterprises (SMEs). 

The tourism industry of Kerala is still not a part of this knowledge economy. “New products and services have appeared in the tourism sector with the emerging global knowledge economy. These are income-inelastic and more stable,” it says.